Power Equipment Stocks Rally After Superstorm Sandy

As the New York-New Jersey area recovers from Superstorm Sandy, electricity remains spotty and power plants need repair. That has caused some electrical equipment stocks to jump.

One of the beneficiaries is Generac Holdings (GNRC), a maker of backup generators. Its shares jumped 21% last week in the aftermath of Sandy. The stock hit a new high Monday and is now well extended from a three-weeks-tight pattern it formed in mid-October.

CEO Aaron Jagdfeld told IBD last week that the company's products have seen a burst of interest since the storm. But even before then, Generac had become the industry's leading stock.

Another high-rated company in the electrical equipment industry is still forming a base.

AZZ Inc. (AZZ) has reported accelerating earnings growth of 3%, 11%, 34% and 63% the past four quarters. Sales growth was uneven over the same periods, ranging from 11% to 34%. The Texas-based company makes equipment for power generation, transmission and distribution.

In September, AZZ said it's acquiring an Ontario-based galvanizing company as part of a strategy to expand in that line of business. AZZ already calls itself North America's largest galvanizer. (Galvanizing is the process of adding molten zinc to metal components to protect them from corrosion.)

The stock soared 10% on Wednesday, the first day of trading after a two-day halt due to the storm. AZZ shares have held much of that advance and appear to be forming a flat base or shallow cup.

The stock is thinly traded. But that doesn't mean it lacks institutional sponsorship. Among the nearly 300 funds that own the stock, a few dozen have performance ratings of A from IBD.

As the New York-New Jersey area recovers from Superstorm Sandy, electricity remains spotty and power plants need repair. That has caused some electrical equipment stocks to jump.

One of the beneficiaries is Generac Holdings (GNRC), a maker of backup generators. Its shares jumped 21% last week in the aftermath of Sandy. The stock hit a new high Monday and is now well extended from a three-weeks-tight pattern it formed in mid-October.

CEO Aaron Jagdfeld told IBD last week that the company's products have seen a burst of interest since the storm. But even before then, Generac had become the industry's leading stock.

Another high-rated company in the electrical equipment industry is still forming a base.

AZZ Inc. (AZZ) has reported accelerating earnings growth of 3%, 11%, 34% and 63% the past four quarters. Sales growth was uneven over the same periods, ranging from 11% to 34%. The Texas-based company makes equipment for power generation, transmission and distribution.

In September, AZZ said it's acquiring an Ontario-based galvanizing company as part of a strategy to expand in that line of business. AZZ already calls itself North America's largest galvanizer. (Galvanizing is the process of adding molten zinc to metal components to protect them from corrosion.)

The stock soared 10% on Wednesday, the first day of trading after a two-day halt due to the storm. AZZ shares have held much of that advance and appear to be forming a flat base or shallow cup.

The stock is thinly traded. But that doesn't mean it lacks institutional sponsorship. Among the nearly 300 funds that own the stock, a few dozen have performance ratings of A from IBD.

See Also

The maker of residential and industrial generators reached a 6-month high after topping views by 21 cents with a 12% EPS dip to 98 cents. Revenue rose 7.4% to $404 mil, beating views for $359.3 mil, as generator sales to the oil and gas industry rose. Generac (NYSE:GNRC) said it expects '15 sales ...

Generac (NYSE:GNRC) shares touched a six-month high Wednesday after it reported strong fourth-quarter sales and earnings, which got a boost from generator sales to the oil and gas industry. The maker of residential and industrial generators also expects 2015 sales will rise in the low-to-mid-single ...

Stocks twisted opening gains into thin losses Thursday, as economic news and company reports fed the bulk of early action. The S&P 500 dipped 0.2%. The Nasdaq hovered a fraction into the red and the Dow Jones industrial average held effectively flat. Volume rose 8% on the Nasdaq and dipped 15% ...

11/06/2014 10:41 AM ET

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